Berger Paints India Ltd (NSE: BERGEPAINT) Q3 2026 Earnings Call dated Feb. 05, 2026
Corporate Participants:
Unidentified Speaker
Nitin Gupta — Investor Relations
Abhijit Roy — Managing Director & Chief Executive Officer
Analysts:
Unidentified Participant
Sucrit Patil — Analyst
Pratik Gothi — Analyst
Presentation:
Nitin Gupta — Investor Relations
Good evening everyone.
This is Nitin Gupta from MK Global. I would like to welcome all to the Burger Paints India Limited’s Q3 FY26 result conference call. I thank Berger Paints management for allowing us to host. We have with us today Mr. Abhijit Roy, Managing Director and CEO Mr. Kaushik Ghosh, CFO Mr. Sujyoti Mukherjee, Vice President Finance and Accounts and Santan Sarkar, GM Finance and Accounts. I shall now hand over the call to the management for the opening remarks post which we will proceed with the Q A session. Over to you sir.
Abhijit Roy — Managing Director & Chief Executive Officer
Thank you Nitin. And good evening to all of you.
With me today here is Kaushik and Santan is on the line in Kolkata. Let me start with the presentation. We have just a quick highlights of the quarter three performance. High single digit volume growth while value growth remains muted. Extended monsoon spillover into October impacted demand momentum year on year and quarter on quarter. Expansion of gross margin backed by improved product mix and stable raw material prices. And PBDIT margin is within the guided range of 15 to 17% standalone. If you look at the performance 8.5% volume growth, the value growth relatively much more muted at 0.4% value volume gap driven by mix shift, higher share of economy emulsions, textures and tile adhesives coupled with price corrections taken in financial year 25 in the economy immersion segment.
The two together had that impact of volume growth being relatively stable. But value growth being at 0.4%. Automotive segment delivered steady quarterly performance while protective including GI remains muted. If you look at the volume and value kagar of quarter three and nine months. If you focus on the nine month, you know figures, it’s an interesting figure that you will see that in the volume growth for two years, three years, four years, five years, whichever you look at it, five years of course is at 13.9%. But in the two, three and four years it’s been hovering in that 8 to 10.7 range.
So it’s nearly that high single digit to double digigit type of volume growth. But value growth correspondingly is progressively reducing from 13.4% to 8% to 2.8 to 1%. Now the questions can be asked as to why 4 years and 5 years the gap were much lesser and why has it been increasing. When you look at the three year, two year or the current quarter, there are two major reasons for it. One is the fact that there was this price drop which happened to the extent of about four and a half five percent which created this gap for two years consecutive.
And then subsequently there was this price drop which happened in the case of economy emulsions which was about 2.2.5% which is still persisting up to December January 23rd it was there and no longer there after that. The second reason is the improved sale of certain high volume low value products like textures, style adhesives, the growth rates of which are much much higher than paint. So therefore the volume growth happens to be there, but the value growth is relatively muted. In such a case though, the profitability as you can see from the gross margin remains at a healthy level.
If you look at the gross margin figures, in fact this quarter it has been the highest in the last 15 odd quarters barring quarter four of last year which was matched at 41.2% this quarter two it is at 41.2%. At the EBITDA level of course it is at 16.1 largely because of the scale effect. The value sales growth did not happen. So obviously overheads got spread over a lesser value and hence otherwise the EBITDA also would have been more closer to 17, but it’s showing a 16.1% here, but well within the range of the 15 to 17% guidance that we have given all through standalone quarter three results.
If you look at you know. Therefore total income from operations increase of 0.4% gross margin 4% expansion EBITDA margin flattish at minus 0.1 and PAT of course is minus 2.5% YTD basis it is 1.2% gross margin expansion of 2.5 PVDIT minus 4.4 and PAT at minus 8.8%. Similarly, consolidated is very similar to standalone at 0.3% in terms of top line and minus 0.2% in terms of bottom line and on a YTD basis it is at 1.9% value growth and minus 5.4% in terms of EBITDA growth. Decorative Business the dealer network expansion continued during the quarter driven by installation of 2,500 plus colorbank machines which is you know what we had indicated that we will possibly do and enhancing presence through addition of stores and currently the store numbers are in excess of 1,800 stores across the country.
Store led urban initiatives undertaken in prior quarters are on track resulting in positive traction with momentum expected to sustain. Newly launched emulsion Color plus and metallic enamel and metallic water based paint launched very recently performed well. Construction chemicals delivered robust growth driven by differentiated offerings such as roof segment, dam proofing solutions supported by the successful launch of Dam Shield and strong traction in the tile adhesive segment. Strong double digit and volume growth registered in wood coating segment. These are some of the products which we introduced. The Color plus is an interior premium emulsion doing quite well in the markets where we have launched so far.
Silk Metallics is a new one which we introduced more towards the end of December doing very well in most markets. Already in January we clocked a healthy sale. February also has been started, you know and now I think we expect that the metallics of Luxall metallic and Silk metallics these are high profit margin products and doing quite well across the country. The other is, you know, in terms of the expanding range of construction, chemical products and waterproofing range. We added Dam Shield which is another product which which we added in the last quarter and we are going to add one or two new products this quarter as well.
Industrial business auto segment delivered high. In protect on and general growth under pin industries. Volume and value remained muted. These are some of the photographs of the stores that we are setting up in various markets. Net cash position consolidated has improved from about 689 crore in March 25 to 918 crore in December 26. Console performance Bolic’s strong top line and operating profit growth partly aided by P L appreciation. BJ Nepal muted revenue and profitability amid political disruption. But things are stabilizing there. STP Limited top line impacted by temporary shutdown at Jamshedpur plant operations normalized from January 26th.
So now it’s okay. SBL Specialty Coatings Limited revenue impacted by weak industrial demand and tariff impact. Profitability affected by scale and one off start off costs. We set up a new factory near Chandigarh which consumed you know, some initial expenses but it is one off and should come off, you know from this quarter. Berger Becker Coatings robust sales and profitability driven by scale and margin expansion. And Berger Nippon Paint Automotive Coatings strong double digit revenue growth aligned with buen demand in auto space. Profitability also strong double digit growth improved. Improved actually and aided by stable raw material prices as well.
ESG excellence at Berger Paints with A score of 64 across ESG parameters given by NSE score is a leader amongst the peers within India in the paint domain. We also got, you know our corporate office was lead Platinum certified. We got the certificate in last month. It’s December 2025 business outlook. Demand conditions continue to be closely monitored with early signs of gradual improvement. So October was negative. November slightly positive. December more positive. January slightly more positive than December. So it’s improving month on month. Focus remains on revenue growth with sustained gross margins remaining the key objective.
Operating margins are expected to remain within the guided range. Competitive intensity expected to remain elevated. Continued investments in branding, distribution, expansion and urban initiatives remain key to capture potential demand improvement as and when it keeps happening. Geopolitical uncertainty, forex volatility and evolving tariff dynamics may pose near to medium term volatility. Thank you and open to questions.
Nitin Gupta — Investor Relations
Thanks Abhijit. So we will now start with Q and A session. I hand over the call to my colleague Mohit Dudeja to moderate the question and answer session. Over to you Mohit.
operator
Thank you. Those of you. Those of you who have questions can raise your hand.
Now we’ll announce your name and unmute your line. Please highlight your full name and the organization you are representing. The first question is from the line of Mihirsha. Please write your full name and the organization you are representing and go ahead with your questions.
Unidentified Participant
Hi sir, good evening, this is Mihisha here from Nomura. Thank you for taking my question. Sir, I wanted to check with you. If you strip off the month of October from the results, how is the sales growth momentum for November and December? And any insights you can share on how that continuity happened is happening in Jan as well.
You did mention that you know the EBITDA margin would have been closer to 17% if the impact wasn’t there. Some insights on the sales growth momentum would be helpful, sir.
Abhijit Roy — Managing Director & Chief Executive Officer
Yeah, so as I had mentioned, you know, October was negative, you know and which I had indicated in the last time we met, you know, here with all of you, November did have a slight positive and then December was better than that in mid single digit type of a growth rate and. And that is where we are in January as well. So that is how it is in terms of value, in terms of volume and obviously that differential still exists up about 7%, 6 to 7%.
Unidentified Participant
Understood sir. Any insights on the competitive landscape that you can share? It remains stable. The way it was is some deceleration or now you know, Gradually, the other players were kind of getting stagnated. Any insights on how the intensity is shifting on the competitive front, please?
Abhijit Roy — Managing Director & Chief Executive Officer
It remains very stable now, you know, more or less. You know, the main player remains at a, at a stable point now in terms of competitive intensity, it’s not increasing, it’s not decreasing. It is at a stable level. Quarter on a month, on month we see the values remaining very similar, you know, to that category.
And you know, on a quarterly basis, if you look at it, there is no major gains happening. Yes, there is a slight gain, but not like they were growing at say, you know, 35, 40, you know, now it’s 7, 8, 10, 12% type of a gain.
Unidentified Participant
In light of all these, how do you see the next year shaping? Because now we have at least two years of lower value growth in the base. Can one expect and there are most of the tailwinds around the macro parameters already there. Can one expect any improvement in volumes to go to mid teens levels in next year and then you can go back to double digit growth in value terms over the next year, Sir.
Abhijit Roy — Managing Director & Chief Executive Officer
So I think, you know, the double digit volume growth should happen and it is already very close to it. We should be able to definitely go into the volume, double digit volume growth happening. As far as value growths are concerned, I think the differential will remain in the extent of 4 to 5%. So if the volume growth goes up to say 12, 13%, then the value growth should be in the range of 7, 8%. That’s where I think it should be and that’s, I think, realistic as of today.
Unidentified Participant
Got it. Thank you very much. Wishing you all the very best, sir.
Abhijit Roy — Managing Director & Chief Executive Officer
Thank you.
operator
The next question is from the line of Sukrit Patil. Please go ahead.
Sucrit Patil — Analyst
Good evening to the team. My name is Sukrit Patil from Isight Fintrade Private Limited. Am I audible?
Abhijit Roy — Managing Director & Chief Executive Officer
Yes, you are.
Sucrit Patil — Analyst
Yes. Thank you. My first question to Mr. Roy is, as the decorative paints market continues to evolve, how is the management thinking about prioritizing growth levers such as distribution reach and product innovation? Among these, which do you believe will be most critical in strengthening Baja Paint’s competitive positioning and sustaining long term brand leadership? That’s my first question. I’ll ask my second question after this.
Thank you.
Abhijit Roy — Managing Director & Chief Executive Officer
Right, thank you. You know, I think both are important and very important for the decorative business and specifically for us. We, as you know, are a number two player, but we have many areas in the country where we have a relatively weak presence in terms of distribution network. We have been ramping up this network, you know, at a furious pace in the last, I would say 3, 4/4. The results will take some time to become completely visible. But it should start showing, you know, very soon because it takes time for a machine to start off and establish itself.
And you know, you get some sales, you know, and the mass builds up. That’s going to happen. And, and that is something which we, and that drive will continue from our side. You know, there are still many areas of the country where, you know, there are gaps in terms of availability of material and which we are now trying to bridge by adding more manpower on the ground and at the same time concentrating on improving our distribution. So that’s, that’s one area which we continue to lay stress on. The second is in terms of the product innovations which you mentioned.
We did mention two or three products which we have recently launched. One, two more in the pipeline, very interesting ones. And I think we will continue to do that for two reasons. One, of course, you know, this channel that we are developing and increasing in size, we already have a fairly large number of machines on the ground and we are adding this. So to these counters we add these innovative products so that improves the sale. The second is of course the profitability moves up. So these are all products with higher margin also normally. And therefore, you know, it tends to boost the profitability as well.
So we will continue to do both of these simultaneously.
Sucrit Patil — Analyst
Thank you. My Second question to Mr. Ghosh is from a financial point of view. Can you elaborate on the key trade offs managed between input cost, volatility, pricing discipline and continued investment in brand and distribution? How do these considerations influence your approach to sustaining cash generation and return metrics across the cycles? Just want to understand your point of view on this and how do you approach this? Thank you.
Unidentified Speaker
So basically, brand building has always been our priority. One second. Can you see me?
Sucrit Patil — Analyst
Yes, yes, very, very clearly.
Thank you.
Unidentified Speaker
Yeah. So basically brand building has always been our priority. And when it comes to margin maintenance, that’s also a very big priority for us. So we continue to, whenever it comes to maintaining the cost ratios, we continue to monitor them on a regular basis. And so there is this constant innovations and the coordination with materials and cost efficacy which we continuously monitor.
Sucrit Patil — Analyst
Is that it means. Okay, fine. Thank. Thanks. Thank you and best of luck.
Unidentified Speaker
Thank you.
operator
The next question is from the line of Aditya Bhatia. Please go ahead.
Unidentified Participant
Hello. Hi. Good evening, sir.
Hi. So my first question is on, on the insights on demand momentum that you shared in the last conference call. We sounded a lot more Optimistic about demand. We were speaking about possibly mid single digit kind of revenue growth in third quarter. Touching close to double digit kind of a revenue growth towards fourth quarter this time around it has changed a bit and not only for you but for the entire sector. Just want to understand how things changing at the ground. Why is the same optimism that was there last time around not there? That’s my first question and my second question is on RM costs, is there any progress that has been made on anti dumping duty on TIO2? Right.
Abhijit Roy — Managing Director & Chief Executive Officer
You know, very valid question that you asked. You know I was also optimistic, you know, about being more closer to, you know, 7, 6, 7% in terms of the growth and possibly going towards the 8, 9% mark, you know, by the fourth quarter. That was the expectation that once the rain stopped the demand will pick up. It did pick up, but not to the extent that we would have loved to see. Possibly also that, you know, while the rains which was elongated quite a lot, we kept you know, pumping material into the dealer shelves. So there was some amount of stock buildup which happened which got liquidated in the period between November and January.
So therefore, you know, the replenishment sale did not happen to the extent that we would have loved to see there. Possibly it will start, you know, seeing improvement in terms of the actual growth situation. February, March, you know, progressively it should, it should stabilize. This is, you know, to answer your first question, you answered this, you asked another question I think what was the second you asked the. On anti dumping duty. At the anti dumping duty. You know. Yeah, we, we did fight this case and we won this battle in the court and the government, the, the court has given a judgment that you know, it needs to be given back.
So we’ve got part of the money back. The other part we have applied for and we should get back that money also in form of the anti dumping. As of now there is no anti dumping duty on titanium dioxide until that point of time. Therefore the cost has come down for titanium dioxide. Marginally.
Unidentified Participant
Sure. So just just a clarification, is this a final order from the court or is it the stay that they had put.
Abhijit Roy — Managing Director & Chief Executive Officer
It’s a final order which was given. So that’s why the government to refund, you know, the anti dumping duty from the date when that order was given.
Unidentified Participant
Perfect, perfect. Thank you so much for answering my question, sir. Thank you.
operator
Thank you. The next question is from the line of Karthik Jalappa. Please go ahead.
Unidentified Participant
Yeah, hi, Karthik here sir. Am I audible?
Abhijit Roy — Managing Director & Chief Executive Officer
Yes, you are Karthik. Go Ahead.
Abhijit Roy — Managing Director & Chief Executive Officer
Okay, great. Sir, two questions from my side. The first is if we were to look at this value volume gap of about 8% and if I were to bifurcate it between let’s say mix level changes where the economy segment probably did better, as well as let’s say the price revisions that we have undertaken which are yet to probably anniversarize, how will that split look roughly in your opinion? So the mix change will be probably be about three, three and a half percent, you know, on account of the low value high volume products selling much more than other products.
The about two to two and a half percent were on account of direct price drops which were there, which we took in the low end emulsions last year, which is still impacting as I said till January. This impact was there from February onwards. That weans off the third part which was there is we increased our spends in the Painter spends which was there in reaction to the competition which is there. And therefore that’s about one and a half odd percentage which has gone up. So all put together this gap that is explained.
Unidentified Participant
So sir, in a way going forward to your comment on the value volume gap will still remain 4,5% even as Volum goes to double digit.
So inherently you are making the assumption that the mix changes is something that will continue, isn’t it? Because that’s right, yeah. The price will anniversaries at some point and that is right. Okay, why is that? Why do you think that is the case? Why?
Abhijit Roy — Managing Director & Chief Executive Officer
Because the growth of these categories is much higher. You know, it’s starting from a low base as of now. And therefore, you know, and the market is, you know, quite big. We have just, you know, started and, and therefore the growth rate for us, the trajectory of growth is much, much higher and hence this is going to continue for the next possibly one, one and a half, two years maybe, after which it will obviously start petering down.
Unidentified Participant
Excellent. Okay, my last question sir is I think this quarter as well as probably the previous quarter, the market leader has probably done slightly better than us. And in the past we used to have commentary or slides on our market share gains and not there this quarter, what would you attribute, let’s say the slowness in our market share gain.
Abhijit Roy — Managing Director & Chief Executive Officer
So you know, even today, you know, we are, we have lost a little bit of market share. In fact, market leader has also lost market share. It has gone mostly to Birla. If you take Birla also into one of the categories, given the fact that, you know, whatever they say, we assume that they are saying that this is what they have done.
If you can consider that, then there is a slight gain in market share for them, you know, and losses for everyone else in the system. The reason for the slightly lower growth that you are seeing for us compared to the competitors, because competitor leader you are talking about had a very low base in the third quarter and the fourth quarter of last year as well. Second, third and fourth quarter, the differential was very high. You know, in fact the gap between us and them in the fourth quarter was 9.5%, you know, so they stand at an advantage of nine and a half percent starting.
So obviously I would expect that the growth rates will be higher in their case compared to us. So that is what it is. But we are still, you know, holding on to fairly decent. We didn’t lose any market share last year at all. This year there is a marginal decrease, but you know, we are still there, you know, doing fairly. Okay, I would say, given the current situation.
Unidentified Participant
Got it. Okay. Thank you very much for the detailed responses, sir. Wish you on the team all the very best. That’s all from you.
operator
Thank you. The next question is from the line of Tejas.
Please go ahead.
Unidentified Participant
Yeah, hi sir. Thanks for the opportunity. Sir, first question pertains to your observation or your comment that you made that the competition from the big challenger has plateaued. I just wanted your observation or comment on the broader competitive landscape as level. So there are, there is a long tail of competition also which is joining the industry, be it smaller fragmented players are also coming. And, and then there is also consolidation which is creating another large entity which is Axios jsw. And then we also picked up that Haisha also. It’s not a very sizable competition.
But Haisa is also from Pedalide, is also kind of entering East India. So when we zoom out and when we see it competitive landscape overall, not for only on from one new player. How, how would you read that?
Abhijit Roy — Managing Director & Chief Executive Officer
So you know, this, this type of competition, the other competitors that you spoke about, you know, those type of competitors have been coming into this country and fighting for long years. Some of the MNCs we used to keep coming in, you know, sometimes Hempel will come, sometimes Jotun will come, sometimes Sherwin will come, sometimes two other people will come.
So they are there, but they are not very disruptive or you know, takes away a large chunk of the business. So it is impacting but to a lesser degree I would say, you know, maybe all combined together they may be again impacting the growth rate by one, one and a half percent. But that’s about it. Right. But the bigger impact is coming from that one player which is, you know, stabilizing. So. So I would place it in that way. The other players who are there are not very disruptive or not coming from zero base. They are there for now quite some time.
The incremental gains that they are making is not substantial to disturb the equilibrium in the system.
Unidentified Participant
Fair point, sir. So second, just referring to earlier participant question that the industry at large gave very positive signals in the previous quarter and investors also kind of, we want you to say good things. So we also kind of cheered it very, very happily and then the same could not last for a quarter. So just wanted to understand what is the forecasting significance of some of this high frequency monthly numbers or should we rather wait for at least two quarters before we say that the worst is behind? And then that along with one broader question, that if our bulky scenario is 7% value growth for us, 5 to 7% or you said mid single digit, the government of India is actually hoping for 10% nominal GDP growth rate.
So now when I tie it up with low penetration of the category and we not even eyeing or targeting nominal GDP growth rate, where’s the disconnect why this number and that number are not matching?
Abhijit Roy — Managing Director & Chief Executive Officer
Yeah. So, you know, why is this that, you know, we were relatively more, I would say, positive in our outlook. And why we are not saying that, you know, is largely because, you know, normally in the paint industry we had seen in the past that when rains happened or when there was a disturbance in the demand situation and it got broken for some time, like say Covid or like any other disturbance in the system and the paint demand was disrupted.
When it came back, it came back. You know, all the pent up demand used to come back and it used to be far more stronger demand once it came back. This time, when it did come back, it did not happen at the pace at which we had seen earlier. Now you might ask why did it not happen? Why did it happen in the past and why did it not happen now? It can be that, you know, as I said, we were still playing the game. It was not completely disrupted. We were selling, we were still growing at a lower pace maybe, but it was still there, hanging on there.
And therefore there was a built up demand in the system which got liquidated in the next two, three months. The second reason is that there are other new players who have come into the system which again we should have anticipated that was there still there and that growth rate is still disturbing. Right. So that to that extent it did not bounce back fully. You can say that why are we not looking at a 10% nominal growth should result in at least a 10% growth for the industry. True, it should. Logically, you know, that is how it should be.
But given the current context that at which pace which we are growing, we want to be conservative and be very sure that what we are saying we should be able to deliver. And that’s why we are saying that it may so happen that we may actually grow at what you are saying as 10% possibly next year. But you know, we would like to be playing it safe. We don’t want to say that, you know, we will grow at double digit and then land up with 4,5%.
Unidentified Participant
Thanks for the detailed answer. And if I may squeeze in last one, any pocket of demand beaten product side or regional side which is doing much better than the aggregate numbers that we are delivering.
Abhijit Roy — Managing Director & Chief Executive Officer
Well, you know, some, some of the products, you know, as we have always said, you know, construction, chemical, waterproofing, wood coatings, some of our emulsions, you know in the premium category are doing quite well, much better than the categories itself and, and overall growth rate of the company. And in, in some regions some of the urban markets where we have invested have started doing better than what we used to do and much better than the category growth rate.
Unidentified Participant
Thanks and all the best for coming quarters.
Abhijit Roy — Managing Director & Chief Executive Officer
Thank you.
operator
Thank you. The next question is from the line of Pratik Gauthi.
Please go ahead.
Pratik Gothi — Analyst
Hello.
Abhijit Roy — Managing Director & Chief Executive Officer
Yeah, Pratiko.
Pratik Gothi — Analyst
Yes, thank you for the opportunity. This is Pratik Ghoti from hsbc. Most of my questions have been answered. I want to push on a particular point you made regarding some down trading to the economy segment from premium and luxury in general. Could you elaborate on that? Why do you see that is happening? Why do you think that is happening? This is my first question.
Abhijit Roy — Managing Director & Chief Executive Officer
It’s not really down trading per se. You know we, the luxury category is not growing as much. You know part of the reason can be that you know, in our case at least, you know, much of the luxury category growth and the luxury base exists in the east.
For us the east market hasn’t done all that great in, in the last few months and therefore you know, for us luxury category has been a bit muted. The economy category on the other hand, you know, has been doing better. This is an upgrade actually from lower down distemper etc moving into emulsions. There has been a price cut which we had taken which I mentioned about in the economy imulsion also it is Therefore much more price competitive and therefore the demand and the volume growth has been higher in the economy.
Pratik Gothi — Analyst
Sure, this helps. Since we’re talking about regional presence as well.
I remember that you also have a decent presence in Uttar Pradesh. I think it’s above average in terms of a national presence. So any regional trends from that particular state where growth has been strong, at least the GDP growth underlying growth has been strong there. UP has been doing any trends there.
Abhijit Roy — Managing Director & Chief Executive Officer
It continues to do well for us.
Pratik Gothi — Analyst
Okay. Okay. Thank you for the answers. Thank you. It’s all for mine.
operator
Thank you. The next question is from the line of Rishi Modi. Please go ahead.
Unidentified Participant
Yeah, yeah. So first question I had was on the resin facility that you all have operationalized.
Just wanted to get an understanding on how much gross margin, how many bips gross margin expansion should come from this and what do we intend to do with that margin accretion? Are we going to retain it, let it flow to the bottom line or we’re going to use it somewhere in the p.
Abhijit Roy — Managing Director & Chief Executive Officer
Well, you know, not very significant. I would say though it will have some impact. You know, this is basically for solvent based production which we have started, you know, which we are going to start in Hindu pool. We are expanding there in our southern plant.
It is meant for industrial paint, also for decorative, more so for industrial and also a little bit for decorative paint. This is, this was necessary because you know, we were a bit stretched in the industrial side for capacity. And this will help us to actually be comfortable as far as production capacity is concerned on the industrial side, which is growing at a decent pace, especially the automotive start picking up. And at the same time we expect protective and general industries also to pick up soon. And therefore, you know, we wanted to have the capacity in place beforehand.
So this is the reason why we have, you know, started off the resin manufacturing capacity. It will have some impact, but that will possibly be utilized by us in the market. It is quite intense in terms of competition. So possibly we will have to spend a little bit more. No, we will. Brand building efforts might require, you know, more money there. So therefore, you know, that might go there.
Unidentified Participant
Got it, got it. Second question I wanted to understand. You know, you mentioned that you all will have a 4 to 5% gap on the value volume numbers.
Asian paints also mentioned the same thing and the rational given by both of you all is that non paint products which are lower ASP are growing faster and economy is growing faster than premium for Asian. I can understand because a larger portion of their decor paints is premium paints for us it’s kind of the reverse where we are more dominant in the economy and the exterior paint segment and we are making our forays into the premium segment. So shouldn’t ideally that gap be much lower for us or do you think the demand for premium is not there or we are missing something in that proposition? Hence our economy is still going to grow ahead of premium.
Abhijit Roy — Managing Director & Chief Executive Officer
And I explained that, you know, a minute, a few minutes back, you know, as to why this is happening. Our reasons are different, you know, their reasons are quite different. As I said, you know, we have our own reasons why the eastern area did little bit of underperformance, you know, for our own internal reasons which we have corrected now. So therefore, you know that a growth rate will be restored. You know, as far as the luxury emulsion is concerned, premium in our case is doing quite well. It’s the luxury which is slightly below par. The economy immersion on the other hand is growing because the category itself is growing.
India is a vast country even for them and for us, you know, whether we are present slightly more in terms of percentage but they are also equally present. There are, both of us are growing because the category is growing at a faster pace. So that’s the reason why economy immersion keeps doing better. Got it.
Unidentified Participant
And so final question from my end, it’s more on the capital allocation piece. Given that we’ll be generating close to 1400, 1500 crores of cash flow from operations over the next couple of years, what of amount of that will be used for organic Capex and what do we plan to do with the remainder and are we open to doing buybacks at the, you know, given the current valuations instead of paying out dividends.
Abhijit Roy — Managing Director & Chief Executive Officer
So you know, we believe that it is a growing country even though the growth rates have been a bit under the water, you know, for some time now. But we believe that things are going to change. As of now we have plans for two factories, one in Panagar and one in Orissa. Both of which together is an investment of about 1800-2000 crore. So it will absorb the free cash flow that is there. We already have about 900 plus crores in our books and as you said, you know about 1400 crore might be generated in the next two years.
So this will be consumed a large part of it in this two new factories which are going to get set up, whatever leftover is there. Well, you know, we don’t know as of now. We keep looking at acquisition opportunities but we don’t look at very big stakes. We look at small Stakes which we can integrate with us, you know, either in terms of new technology or new geographies or new product lines which can help us to grow at a faster pace.
Unidentified Participant
Got it. So got it. No plans for buyback though at this.
Abhijit Roy — Managing Director & Chief Executive Officer
Not at this present.
Unidentified Participant
All right, great. Thank you. That’s it from my end.
operator
Thank you. The next question is from the line of Aniruddha Joshi. Please go ahead.
Unidentified Participant
Yeah, thanks for the opportunity, sir. While the market growth is slow, the onus to grow is on market leader and even Berger also. So what will be our initiatives to innovate? Drive growth of the market means what is really required, like in terms of higher ad spends or higher ad spends of the premium products or in a way, little bit price cuts means what it’s can really drive the growth of the premium end of the market.
And in a way, premiumization also should be driven from the corporate side as well. So reducing the gap between premium and economy products. Will that serve as the purpose? So, so what are the thoughts on these aspects? That is question number one and then question number two. The new challenger player had indicated that its share of voice was more than 30%. So. And the share of voice of other players had declined materially. So has there been any change in that now? And has the share of voice for especially Berger has gone back to its share of market or probably higher than share of market also? Yeah, that’s it from my side.
Abhijit Roy — Managing Director & Chief Executive Officer
Yes, to answer your first question, it is true that, you know, it’s incumbent on the major players in the industry to try and shore up demand. You know, there are two major things which can happen which can help build up demand. You need to create excitement by generating new product ideas, new thoughts, something which is different and, you know, which the consumers want, you know, and, and we keep looking at innovative product launches. We have been, you know, doing so for some time now. You know, many, many new products which we are using introduced into the market, which later got copied in the industry.
And we will continue to do so in the, in the near term. We are, you know, we just introduced, you know, two products, three products actually. You know, damn, Shield Color plus and the metallic range, all of which are in this premium, super premium category and with good profit margin and at the same time much in demand in the marketplace. And I think it should do well. You know, so that’s one part. The second which you said, you know, what was the other question which you asked about? Share of voice. Share of voice. So, you know, in terms of the advertisement that we do, we are on par with almost, you know, our market share.
The, the player that you spoke about, you know, is much in excess of the market share that they hold. And that’s their entry strategy, which they don’t have to worry about their profitability. We do. And, you know, we, we are very conscious about it and we want to remain in the band which we have indicated. Our gross margins are to be protected. We can’t operate at negative margins and all, you know, so spending money is not, you know, something which anyone can do. If you have to be profitable, then you have to be careful in doing so.
Unidentified Participant
Okay, sure. Sir, just, last question from my side. You indicated loss of some market share. If you can elaborate a bit more on that, which region we would have lost east, west, north, south or rural urban metros. Which, which, Any, any color.
Abhijit Roy — Managing Director & Chief Executive Officer
It’s a minor share loss. You know, we were at 19.5, 19.6. It would have probably gone down to 19.4 overall 0.2% loss across, you know, various markets. Not as if, you know, we have dropped by 2, 2% or something, you know, so 1, 2.3 here and there, some gains, some losses. You know, it depends on the market.
And some of it is, you know, manpower driven. Our own changes which have happened, you know, so there is no specific market I can point out, you know, where we are losing share.
Unidentified Participant
Okay, sure, sir, Very helpful. Many thanks.
Abhijit Roy — Managing Director & Chief Executive Officer
Thank you.
operator
Thank you. The next question is from the line of Kumar Doshi. Please go ahead.
Unidentified Participant
Hi, Abhijit. Thanks for the opportunity. Just could you elaborate a little bit on. Com? You know, your comment on competition is stabilizing the new competition. So one is, you know, whether it is, you know, the dealer penetration, tinting activity or at dealer level, market share that you may be tracking for some of your key dealers, is it more or less referred? Were you referring to their overall sales number, secondary sales, if there is one.
And second is, could you give us some color on what, you know, how do you, how have you seen their, you know, trade schemes and rebates, whether that is also stabilizing or are they intensifying the effort? There are.
Abhijit Roy — Managing Director & Chief Executive Officer
So the first question, you know, our reading of the situation is that, you know, if you look at the month, on month sales, sort of, you know, the pressure that we used to feel, you know, that’s not increasing. Right. You know, so when we do our tracking of our counters where, you know, they might be present or new counters where they might be getting in, that also does not indicate any sudden changes happening there in any of the Markets.
So I presume that, you know, it’s very incremental changes which are happening. Which is why I said things are relatively more stable. If you look at, you know, the overall scenario, you know, and when we do track the movements happening in, in, in our network, that is what we see that, you know, we haven’t seen any great disruption happening or great changes happening in the network. So that’s why I am saying, and you will get to see that, you know, primary figures also there will be an improvement sequentially. Porter 2 was relatively muted for them and quarter 3 is a move up from that perspective.
But you know, month on month it isn’t shifting greatly. November and December would be possibly be at similar levels for them. Understood. And trade schemes, rebates, any comment? Trade schemes and rebates have been also very stable. You know, in fact they these days announce, you know, some three month schemes and stuff like that. The variations are limited, there is aggression which continues. They are already, as you know, much lesser in terms of price compared to competition. They were at 5% discount in DPL itself. Now they have taken price increase, as you know, they have announced two price increases, you know, totaling to 2 to 2.5% approximately on them.
Correct. Some of them are now almost matched in the luxury category and in the commodity, you know, the differences are still there. So therefore the DPL difference has narrowed down. As far as the schemes are concerned it is still higher, but as I said, stable, you know, not increasing. Not doing something disruptive.
Unidentified Participant
Very helpful. Last thing, they were late entrant in eastern region. So you know, even in east they have not been able to sort of, you know, penetrate or. Hello. Yeah, they were late entrant in east. Right. So in the east Eastern region in West Bengal and Northeast.
Yeah. Also you’re not seeing any increase in activities. Very stable there as well. Stable there.
Abhijit Roy — Managing Director & Chief Executive Officer
You know, no major change seen so far.
Unidentified Participant
Final one, if I may, anything you have seen different on EXO from EXO after the announcement of
Abhijit Roy — Managing Director & Chief Executive Officer
things which they have done, you know, one is of course, you know, some of the price corrections. They used to be at a much higher elevated level in terms of their DPL etc. They have reduced their prices and matched it to the market rates. You know, so that’s one thing which is clearly visible. Obviously you know, that was, you know, constraining them in terms of their prices being high in the market.
So that is that what something which they have adjusted. They have launched one or two products in the economy category. We, you know, which, which they are trying to penetrate and, and adding some manpower in, in the sales team. Beyond that, you know, I think they are a reasonably stable player and I.
Unidentified Participant
So basically rational competitive behavior.
Abhijit Roy — Managing Director & Chief Executive Officer
That’s right. You know, no, irrationality is something which is being shown.
Unidentified Participant
Perfect. That is very helpful. Thank you so much and wish you the very best.
Abhijit Roy — Managing Director & Chief Executive Officer
Right,
operator
thank you. The next question is from the line of Anurag Dayal.
Please go ahead.
Unidentified Participant
Yeah, hi sir, this is Anurag Dal from Philip Capital. My question is on the industrial paint category. The growth trend has been mixed. While some of the competitors are doing well in this segment, especially for the protective coating segment, we have not done that well. What’s the reason behind it? A and second, how should we look at the industrial segment growth going forward? Would, could we return to kind of a double digit trajectory there in FY27?
Abhijit Roy — Managing Director & Chief Executive Officer
Right. No, you’re right. You know, so automotive we are okay. You know, we could have done a slightly better than what we did, you know, but the growth rates were actually there much more in the cars, you know, not so much in the other categories.
We, we could have registered say another 3, 4 percentage, but that’s about it. In protective we could have done better. Our prices are slightly on the higher side. I think, you know, we will have to adjust a little bit and be more competitive. Our EBITDA margin is much higher than competition. We are the leader in this category. We thought that, you know, we should be able to maintain that price gap, but we may have to adjust a little bit and the growth rates can be restored.
Unidentified Participant
So could we expect a double digit growth trend of next year?
Abhijit Roy — Managing Director & Chief Executive Officer
We should be able to do that.
Unidentified Participant
Okay, that’s great to know, sir. And secondly, just on the decorative side cubes, we already had a 8% volume growth this quarter. So it’s safe to assume that you would reach a double digit, kind of a 10% in Q4 and maybe maintain a 6% kind of volume value gap.
Abhijit Roy — Managing Director & Chief Executive Officer
Yes, you know, you can, you can think like that.
Unidentified Participant
Thank you, sir. Thank you. That’s my questions.
operator
As there are no further questions, we consider that as the last question for the day. I hand over the call to the management for the closing remarks.
Abhijit Roy — Managing Director & Chief Executive Officer
Thank you all for coming, taking time out and reaching here and best of luck for the rest of the day.
Thank you.
Unidentified Speaker
Thank you.
operator
Thank you on behalf of MK Global Financial Services. That concludes this conference. Thank you all for joining us.